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Network security vendor Arbor Networks has been drumming up publicity for its upcoming Internet Observatory Report this week. One of the widely reported tidbits is that P2P has “declined dramatically in the last two years,” and that it has been replaced by YouTube and other streaming video sites. Wired News took away from the report that “P2P is dead,” and ReadWriteWeb ran with the title: “So long, P2P, Hello Streaming Media.”Findings like these are puzzling to anyone who’s been frequenting any of the big torrent sites lately. File sharers still seem to be as busy as ever, exchanging pretty much every movie and TV show episode you could think of. And didn’t Cisco just recently forecast that global P2P traffic will keep growing in years to come? Turns out, it’s all about how you interpret the numbers.The Internet Observatory Report, which is scheduled to be presented at the North American Network Operators’ Group Meeting in Michigan on Monday, is the result of two years of research by Arbor Networks, the University of Michigan and Merit Network. It’s based on traffic analysis from 110 participating ISPs, and the total amount of data analyzed was more than 256 exabytes, according to an Arbor Networks press release. Yeah, I had to look it up as well: An exabyte is one billion gigabytes.One conclusion of the analysis of all this data is that P2P isn’t as dominant as it used to be. In 2007, it accounted for 40 percent of all Internet traffic, according to Arbor. Fast-forward two years, and it’s down to 18 percent. However, that doesn’t exactly mean that P2P is dead. It’s just not growing as fast as web-based video streaming, which has been largely responsible for a huge overall growth of net traffic. In other words: A smaller piece of a much larger pie can still be a whole lot of pie.I asked Arbor Networks Chief Scientist Craig Labovitz about this, and his answer confirmed my hunch that the picture looks very different when it comes to absolute numbers: “We found overall average Internet traffic growing globally at 35-45 percent annually,” he told me. “So the decline in P2P ‘market share’ is likely as much that P2P is not keeping pace with overall Internet growth as a decline in P2P traffic volumes.” Labovitz said that Arbor doesn’t feel as comfortable publishing absolute numbers of P2P traffic because of issues like encryption, but he still suspects that P2P may be dropping slightly even in those terms.So what does all of this mean? P2P is less dominant than two years ago because of the explosion of web video, but it’s hard to figure out how that relates to media consumption habits. Some users may give up on BitTorrent because of Hulu.com. Others may still download TV shows, but watch disproportionally more web-exclusive and user-generated content on YouTube. Either way, P2P is still very much alive.